Williams-Sonoma Inc (WSM)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Apr 30, 2022 | Jan 31, 2022 | Jan 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 119.34 | 132.03 | 125.01 | 119.83 | 135.27 | 140.51 | 162.80 | 160.28 | 115.39 | 133.85 | 117.79 | 138.64 | 147.67 | 172.73 | 184.05 | 135.59 | 143.78 | 121.59 | 124.17 | 134.67 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | 5.72 | — | 6.18 | — | 5.01 | — | — | 4.70 | — | 5.66 | — | 5.11 | — | — | 5.69 |
| Number of days of payables | days | — | — | — | — | — | 68.53 | — | 77.51 | — | 61.44 | — | — | 51.55 | — | 78.60 | — | 66.18 | — | — | 66.18 |
| Cash conversion cycle | days | 119.34 | 132.03 | 125.01 | 119.83 | 135.27 | 77.69 | 162.80 | 88.96 | 115.39 | 77.42 | 117.79 | 138.64 | 100.82 | 172.73 | 111.11 | 135.59 | 82.71 | 121.59 | 124.17 | 74.18 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 119.34 + — – —
= 119.34
The cash conversion cycle of Williams-Sonoma Inc has fluctuated over the periods provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally more favorable as it indicates that the company is able to generate cash quickly from its operating activities.
Looking at the data provided:
- The cash conversion cycle ranged from a low of 74.18 days on January 30, 2022, to a high of 172.73 days on October 31, 2022.
- The cycle fluctuated notably over time, indicating potential challenges with managing inventory, collecting receivables, or paying suppliers.
- There are instances of improvement, such as the cycle dropping to 77.42 days on July 30, 2023, but also periods where it increased significantly, like reaching 162.80 days on October 31, 2023.
- By January 31, 2025, the cash conversion cycle had decreased to 119.34 days, suggesting some stabilization but still leaving room for potential optimization.
In conclusion, Williams-Sonoma Inc should continue monitoring and improving its cash conversion cycle to ensure efficient management of working capital and maximization of cash flows.